Lauded by many, loathed by countless Nigerians, the
privatisation of the Power Holding Company of Nigeria,
PHCN, may continue to generate reactions and comment
until when the new owners prove their worth.

The Federal Government once again took a “giant stride”
towards the refurbishment of the power sector by fully
handing over the electricity company to private firms with
the mandate to provide uninterrupted and quality power
supply in the country.

It could be recalled that a partial takeover started in 2005
when the Government fully controlled National Electric
Power Authority, NEPA, sold a percentage of the company
to private individuals. This was due to the high level
corruption that ravaged the sector where it exposed its
abysmal performances to the discontentment of Nigerians.

Major effort to sanitize the sector proved abortive, even
after partially handing over to private hands. As a matter of fact, power output dropped drastically as megawatts
dropped on a daily basis.Black-outs were the order of the day, businesses collapsed,and sounds of generators became common in many vicinities. Rumors also abounded about top managers in PHCN who were alleged to sabotage the energy sector by promoting and dealing in the business of sales of generators.

It is believed that private investment yield more output
compared to government-controlled organisations which
are usually in the hands of nonchalant personnel. But
perhaps, only if the investment is fully privatised would the desired impact be felt.

Probably in view of the above negative scenarios, President Goodluck Jonathan must have realised the need to finally relinquish the sector to the hands of private investors who have skills, expertise, competence and financial muscle to rescue the sector from further collapse.

It was therefore not surprising when the National Council
on Privatisation, NCP, chaired by Vice President Namadi
Sambo approved “core investor” sale strategy for the
privatisation of the 11 distribution companies created out
of the PHCN.

Recently, President Jonathan handed over the share
certificates and licenses to 14 new core owners of the
PHCN successor companies with an assurance that things
can only get better in the power sector.

President Jonathan described the process of
the privatisation as most transparent in the history of
privatisation in the country and that government is
working out modalities to tackle the challenges such as the payment of severance allowances to the PHCN staff.

Five generating companies and 10 distribution companies
received share certificates from President Jonathan who
also promised that the physical hand over of the assets
would be undertaken soon. He added: “Going forward, this administration is committed to providing all elements are necessary for our private sector partners to succeed in
providing Nigerians with uninterrupted power supply.

To start with, the Nigeria Bulk Electricity Trading Company,NBET, the off-taker, has been provided with a capitalization of over $750 million, positioning it to carry out its mandate without financial constraints.”

It is also gratifying to note that the government has
promised that PHCN workers would get their full
entitlements. This will surely prevent any attempt by
labour to derail the process.

In partnership with the labour unions, the government
should be able to come up with an outcome that is
beneficial for all stakeholders. Labour leaders are therefore urged not to nurse a feeling of displacement, but dwell on the tremendous possibilities partnering with the government through the reform process and urge them to continue in this spirit for the greater good of all Nigerians.

Some pundits believe that means of production is still
being controlled by corrupt politicians. Thus, it is another
stratagem to milk the economy. Be that as it may,
economists have it that, fixing electricity could reduce
business costs by up to 40%, add 3% to GDP and cut mass unemployment, which is the major nucleus behind security issues around the nation.

More so, the issue of kidnapping will be reduced to the
barest minimum as close circuit cameras will become a
common sight on our major streets. This will help
checkmate all sorts of social vices and delinquent acts
commonly found due to blackouts on our streets.

Without doubt, if the takeover is genuine which I think it is, local businesses, local industries will spring up; local raw materials will be harnessed to the optimum.

Apart from the fact that it will reduce unemployment, it will boost the economy as locally manufactured products will take over the imported ones. The economy will be streamlined and self-sufficient. Rather than channel a large chunk of the budget on importation of products, the government will generate revenue from tax levied on such local industries. In a similar vein, the revenue can be diverted towards creating better road network, thus locally manufactured product will be accessible in most, if not all parts, of the country.

Though it will not be out of place to nurse the fear of
increase in the electricity tariff, the new power owners
should assure and ensure that consumers will enjoy better and affordable services.

Thus, when cost of production is minimal as a result of
constant power supply, output will be optimum, and
individuals and industries will afford to pay the new
electricity tariff.

Moshood Isa, a commentator on national issues, wrote from Garki, Abuja

www.vanguardngr.com/2013/11/power-sector-reforms-killing-many-birds-one-stone/